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Crosstex Invests Another $25M in Utica Partnership

Crosstex Energy Inc. will invest about $25 million in a third natural gas compression and condensate stabilization facility in the Ohio River Valley through E2, a company Crosstex formed in March with former management of Enerven Compression Services to serve Utica Shale producers.

When Crosstex announced formation of E2, it said it would put up $50 million, which would include two new gas compression and condensate stabilization facilities (see Shale Daily, March 7). The investment was intended to complement affiliate Crosstex Energy LP's assets in the Ohio River Valley, which encompass crude oil, condensate and logistics operations in the Utica and Marcellus shales.

"We are pleased to make this additional investment in E2 and expand our midstream platform in the Ohio River Valley," said Crosstex CEO Barry E. Davis. "We are enthusiastic about the potential of the Utica and expect there will be many similar future transactions as we build our business in this region."

E2 will build, own, manage and operate all three compressor stations and condensate stabilization assets in Noble and Monroe counties in the southern portion of the Utica Shale in Ohio. The counties are immediately east of the partnership's assets in the Ohio River Valley. The new facility is expected to have compression capacity of 100 MMcf/d and condensate stabilization capacity of 5,000 b/d, which brings the total expected capacity for the three facilities to 300 MMcf/d of compression and 12,000 b/d of condensate stabilization. The facilities are supported by long-term, fee-based contracts with Antero Resources. Commercial start-up of the new station is expected to begin in 4Q2013.

Crosstex Energy Inc. owns the partnership's general partner. A unit of Crosstex Energy Inc. has entered into a $75-90 million senior secured credit facility to finance the E2 investment. Crosstex Energy Inc. owns about 93% of E2 and has rights to purchase the remaining interest in the future.

Last year, Crosstex Energy LP struck a deal to pay $210 million for privately held pipeline services provider Clearfield Energy Inc., which expanded its crude oil and condensate services in the Utica (see Shale Daily, May 9, 2012).

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